Total Eren secures finance for Victoria’s biggest solar farm

Eight months after construction began, French renewables developer Total Eren has finalized the financing agreement for the 256.5 MW Kiamal Solar Farm, Victoria’s largest solar project. The total value of the debt finance stands at around AU$ 250 million (US$ 175 million) and will be provided by ANZ (Australia), ING (Netherlands) and Natixis (France).

The announcement also revealed that the Australian government’s green bank, the Clean Energy Finance Corporation (CEFC) has acquired a minority stake in the project to the tune of around AU$ 51 million (US$ 35 million). For this transaction, Total Eren was advised by Ironstone Capital (Financial), Herbert Smith Freehills (Legal) and PWC (Tax and Accounting).

“We are very pleased to be equity stakeholders in Kiamal Solar Farm – the project that marks the Australian market entrance of Total Eren, an experienced renewable Independent Power Producer,” said Ian Learmonth, CEO of CEFC. “We see the project’s new power purchase model as an important demonstration of how a diverse range of customers can hedge their energy costs through offtake agreements.”

Project background

The $90 million Kiamal Solar Farm is currently under construction and is expected to reach commercial operations later this year. The project will be made up of over 718,000 PV panels mounted on single-axis trackers covering over 500 hectares. The construction is led by Biosar Australia, a unit of Greek infrastructure group Aktor S.A., and Canadian Solar, Chinese solar PV technology supplier.

Kiamal is underpinned by four power purchase agreements (PPAs) contracted with food manufacturer Mars Australia, which signed a 20-year PPA with the project as part of its plan to go 100% solar by 2020, two energy retailers (Alinta Energy and Flow Power), and a new initiative launched by thirteen of Victoria’s water corporations which have partnered to buy clean energy, at a much cheaper rate than would be possible individually. The project is also selling some of the Large-Scale Generation Certificates (LGCs) to Origin Energy.

The project has faced a number challenges being located in north-west Victoria, an area with not enough grid strength. In order to avoid significant curtailment, Total Eren had to install a synchronous condenser on the site as a precondition to win a grid connection from the Australian Energy Market Operator. The developer is working with Siemens and contractor Vinci/Electrix to install the 190MVAr syncon.

Total Eren is also working with TransGrid to deliver a new 220 kV Kiamal Terminal Station and Collector Substation, with the two 180MVA transformers designed and manufactured locally by Wilsons Transformers in Victoria.

The 256.5 MW plant represents Stage 1 of the Kiamal project. As announced earlier, Stage 2 was scheduled to reach 193 MW and options were explored for the approved 380 MWh of energy storage, but the latest release reveals new figures.

Total Eren is now seeking to expand the Kiamal Solar Farm with a second stage of up to 213.5 MW of solar, as well as exploring commercial options for the approved 270MW / 1,080 MWh battery. The massive energy storage system would far exceed the 100MW/129MWh Tesla big battery at Hornsdale – currently the world’s biggest lithium-ion battery.